Time Requested: 60 minutes. I move to approve Contract No for a new Collection Services Franchise Agreement with Waste Management of Nevada.

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1 STAFF REPORT Report To: Board of Supervisors Meeting Date: December 20, 2018 Staff Contact: Carol Akers and Rick Cooley Agenda Title: For Possible Action: To approve Contract No for a new Collection Services Franchise Agreement with Waste Management of Nevada (WM) for a 15-year term with the option of a two-year extension, with provisions establishing the maximum service rates and a rate adjustment methodology for customers, and a franchise fee payable by WM to the City in a not to exceed amount of 8 percent of WM's gross receipts net of surcharge fees billed each month. (Carol Akers; CAkers@carson.org, Rick Cooley; RCooley@carson.org). Staff Summary: The initial term of this agreement will be for a period of fifteen (15) years beginning July 1, 2019 and terminating on June 30, On or before April 1, 2032, the Board may approve a two year extension of this Agreement for the period beginning July 1, 2034 through June 30, WM has reiterated its commitment to providing the highest quality customer service for Carson City businesses and residents. To assure the Board of this commitment, defined requirements for customer service are outlined in sections 8.8 and 8.9 of the Agreement. These requirements are material terms for satisfactory performance of the Agreement. See section 12.1(G). WM has also agreed to provide pre-commencement deliverables prior to the start date of the new agreement. The new agreement includes a reduction in rates for residential and commercial customers across all categories of service. Additionally, WM will provide public outreach to demonstrate its commitment to Carson City. The outreach will include written material outlining the new programs and services offered, schedules, location of customer service office, and contact information. Agenda Action: Formal Action/Motion Time Requested: 60 minutes Proposed Motion I move to approve Contract No for a new Collection Services Franchise Agreement with Waste Management of Nevada. Board s Strategic Goal Efficient Government Previous Action As there is a detailed history in regard to this item including previous action, this section will be combined with the Background/Issues & Analysis section. Background/Issues & Analysis November 2017: The City hired the consulting firm of Sloan Vazquez McAffee (SVM) to assist in the development of an RFP for solid waste and recyclable materials franchise agreement. SVM would also assist in soliciting public input and conducting public meetings to gather input as to what should be included into the new agreement. Final Version: 12/04/15

2 SVM developed a questionnaire to stimulate feedback from current and potential residential and commercial customers from within Carson City. The City hosted the questionnaire on the City's website so that the questionnaire could be completed and submitted directly from this site. SVM also established an address specifically for individuals to request a questionnaire, submit a completed questionnaire, or to provide unscripted input. Questionnaires were also made available for pick-up at the Public Works Department. February and March 2018: Five public meetings were held in order to meet with the public, engage in an open discussion, and collect additional input. The public meeting dates and times and a request to complete a questonnaire were advertised via a note on all water bills, via social media (Facebook, Twitter), communications to the Cason City Chamber of Commerce, communications to the Downtown Business Association, on CarsonNow.org, within specific articles and the opinion section of the Nevada Appeal, and a specific advertisement in the Sunday edition of the Nevada Appeal prior to each public meeting. A total of 475 completed questionnaires were received plus other unscripted comments via and phone message. During this period, potential bidders and other interested local haulers have been solicited to get their input. April, 5, 2018: the Board received recommendations for specific items to be included in the Request for Proposals. The Board provided direction for the inclusion of the following items: 1) franchised residential and commercial services; 2) construction and demolition service would be exempt from the franchise; 3) mandatory residential service would be picked up on a weekly basis with exemption for residents that can prove regular use of the landfill; 4) provide costs for both regular carts and wildlife-proof carts for all customers on mandatory service; 5) automated single-stream recycling service would be picked-up on a bi-weekly basis; 6) provide fee-based commercial recycling that incentivizes participation; and 7) include possible options for the collection and disposal of yard waste which would accommodate seasonal changes. June 21, 2018: The Board provided direction for staff to issue the RFP for Solid Waste and Recyclable Materials Collection Services and draft an agreement to include residential and commercial service, mandatory residential service, automated trash and single-stream recycling service, and options for yard waste services. June 26, 2018: A Request for Proposals (RFP) was published seeking vendors to provide solid waste and recyclable materials franchise collection services. August 21, 2018-October 2018: Five proposals were received on August 21, The evaluation committee reviewed each proposer's background, experience, and proposal. Staff recommended moving forward with Waste Management of Nevada for solid waste and recyclable materials franchise collection services because Waste Management of Nevada had proposed the best value for collection services in response to the RFP. November 1, 2018: The Board directed staff to enter into negotiations with Waste Management of Nevada for solid waste and recyclable materials exclusive franchise collection services. Applicable Statute, Code, Policy, Rule or Regulation Chapter Solid Waste and Recyclable Materials of the Carson City Municipal Code; NRS Chapter 338 NRS (3) & NRS (2) in addition to NRS (3) & NRS (1)(b) Financial Information Is there a fiscal impact? Yes No If yes, account name/number: General Fund and Regional Transportation Fund revenue. Is it currently budgeted? Yes No Explanation of Fiscal Impact: The agreement includes a franchise fee of 8%. 5% will continue to be recorded in the General Fund (FY19 Budget=$519,000) and 3% for roadway impacts will be recorded in the Regional Staff Report Page 2

3 Transportation Fund. This new 3% fee is estimated to generate $305,000 annually which will be added to the Regional Transportation Fund FY 20 budget. Alternatives Do not approve contract and provide alternative direction to staff. Board Action Taken: Motion: 1) Aye/Nay 2) (Vote Recorded By) Staff Report Page 3

4 City of Carson City REQUEST FOR PROPOSALS FOR SOLID WASTE AND RECYCLING FRANCHISE SERVICES Negotiation Report Prepared by: Municipal Solid Waste & Recycling Advisors 3002 Dow Avenue Suite 116 Tustin, CA Office: Fax: December 2018

5 1.0 OVERVIEW The City of Carson City (City) initiated the Solid Waste and Recycling Franchise Services Request for Proposals (RFP) process to enter into a new contract for City-wide collection services. The process involves planning, soliciting and evaluating proposals, and selecting and negotiating with the selected contractor(s), followed by a 6-month implementation period leading to commencement of new services on July 1, The planning phase leading up to the RFP process included the review of numerous programs, services, procurement processes and contracting issues in order to provide insight and formulate recommendations for consideration by the Board of Supervisors. During this phase, input was sought from stakeholders throughout the City regarding current and potential programs and services. The resulting draft Scope of Services was presented to the Board of Supervisors for input and direction. An RFP document was prepared and presented to the Board and ultimately approved for release in June Responses to the RFP were submitted by proposers on August 21, The proposals were evaluated according to the criteria and weighting established by the Board. The results of the evaluation were presented to the Board on November 1, 2018, with the recommendation that Waste Management of Nevada (WM) be selected for negotiations. 1.1 Rationale for Recommending Waste Management for Negotiation WM submitted a comprehensive proposal that demonstrated their knowledge of the community and their willingness to adapt their services in response to the input of community stakeholders and Supervisor direction. The company has extensive collection expertise, a highly-experienced management team and the resources necessary for reliable program implementation and service delivery. WM s key personnel bring years of local expertise and have the ability to effectively service Carson City. The company s performance record and financial capabilities ensure that the company is able to provide stable, high-quality service to the City. WM proposed the lowest residential rate, which include green waste collection as part of the standard service. The company also proposed the lowest rates for additional carts. Their proposed commercial rates will result in significant savings across the board for customers. Their proposed programs would deliver excellent customer service. The examples of electronic and print public education materials provided in the proposal are excellent. The company demonstrated their capability to provide all of the services required, including the establishment of a local customer service office. City of Carson City Franchise Solid Waste Services RFP December 2018 Negotiation Report Page 2

6 2.0 Summary of Negotiation Results On November 1, 2018, the Board voted to direct staff to enter negotiations with WM. A high-level overview of key negotiation results is summarized below. 2.1 Customer Service Negotiations The Board of Supervisors clearly communicated their commitment to ensuring the provision of the highest quality customer service for Carson City businesses and residents. The following is a detailed description of the customer service deliverables and penalties agreed upon during negotiations. WM communicated a clear understanding of the Board s requirements, specific concerns, and expectation for excellent customer service delivery. A. Pre-Commencement Deliverables WM will complete the following deliverables prior to the commencement of the new Agreement. These requirements are included in the Agreement as Exhibit WM will have the local call center fully operational by April 1, WM activated a local phone number at the Sheep Drive facility that is now operational ( ). 3. CarsonCity@wm.com, a local address, is now active and is monitored in real time as the messages come in or at a minimum of three (3) times per hour. 4. WM produced an insert that was included in the November billing containing the local phone number and the contact information. 5. WM will place new phone number decals on WM trucks. 6. WM has started the hiring process for customer service representatives, with offers of employment to be made no later than February 1, WM s contracts with AT&T are being modified to provide more bandwidth at the Sheep Drive facility to accommodate call center needs. 8. WM will order call center phone systems at the first of the year WM will mail out recycling calendars in January and again as part of the new service rollout. 10. WM is developing a local website that will be accessible to customers no later than February 1, B. Contractual Penalties for Non-Performance The Board directed staff to apply clearly enforceable requirements for the implementation of all customer service activities. The following is a summary of the agreed upon penalties associated with failure to provide the required service levels. 1. WM agreed to include Customer Service Performance, as defined in Agreement Sections 8.8 and 8.9 as Events of Default subject to Termination as described in Section 12 of the Agreement. The City retains numerous remedies in the event of default, up to Termination of the Agreement. City of Carson City Franchise Solid Waste Services RFP December 2018 Negotiation Report Page 3

7 2. Because it is in the best interest of the City for any service provider to be given notice of and opportunity to remedy a default, terms for this process were included in the original draft Agreement. WM agreed to add further language, which now gives the City more control in the case of service issues, including an option for the City to enforce a corrective action plan that includes Cityestablished escalated liquidated damages for failure to achieve the requirements of the corrective action plan. 3. Additionally, in the case liquidated damages are used to address individual cases of failure to provide service, WM has agreed to an increased penalty, with the liquidated damage amount now set at $300 per incident as opposed to the original amount of $100 per incident. Individually and combined, these rigorous requirements and stringent consequences work to ensure that any pattern of service failure would trigger the level of penalty that would incentivize the company to activate immediate and systemic correction. C. Performance Standards While penalties for non-performance are important, another critical component of the Agreement is the establishment of performance standards in order to prevent these failures from occurring in the first place. New, more robust requirements for local customer service delivery, customer communication, and outreach and education programs were mandatory components of this RFP process. These requirements were developed to specifically address the concerns communicated by residents, businesses and the Board during the stakeholder input stage of this process. The following are some examples of the customer service requirements included as part of the new Agreement. Local Customer Service Office WM must maintain a publicly accessible office located within the City that is accessible by phone and in person and open Monday through Friday, 8:00am through 5:00pm. Additional, explicit requirements including the number of times the phone can ring before it is answered, the length of time a customer may be put on hold, emergency contact requirements, website requirements, and deadlines for responding to customer issues are detailed in Agreement Section 8.9. Public Outreach and Education WM is providing a full-time Outreach Coordinator dedicated to achieving the City s goals and the requirements of the Agreement. WM s new website will also allow Carson City residents and businesses to look up holiday schedules, confirm service days, pay bills online, and learn more about their service offerings. Customer Communication WM is required to leave a notification tag on any container that is not serviced due to a customer action. For example, tags must be placed on City of Carson City Franchise Solid Waste Services RFP December 2018 Negotiation Report Page 4

8 containers that are contaminated (if trash is placed in a recycling container or green wastes container). The tag would provide the reason why the container was not collected and next steps 2.2 Rate and Fee Negotiation Results The following is a brief summary of the reduced rates or fees achieved during negotiations. A. Roll-Off and Compactor Rates As presented in the initial evaluation report, while WM s residential and commercial rates were lower than those proposed by the other participating haulers, WM s roll-off and compactor rates represented a rate increase for temporary service customers. WM was asked to revisit their proposal and identify opportunities to provide roll-off and compactor customers a stronger value as part of this new Agreement. As a result of the negotiations, WM withdrew their proposed compactor and roll-off rates and instead offered to maintain the current 2018 rates for year one of the new Agreement term. Additionally, WM significantly lowered the proposed rates for front-end-loader compactors. B. Vacancies and Vacation Account Suspensions WM has agreed to waive the option of charging a maintenance fee for vacation account suspensions. Residents have the ability to request a vacation, prior to the date of the vacation, for a time period of one-to-six months. There will be no maintenance fee during the term of the vacation account suspension, and no fee to resume service at the end of the vacation period. Similarly, WM has agreed not to charge a restart fee for vacancies if there is no change to the customer on the account and if the carts remain on the premises. The activation fee only applies if there is a new customer, which requires the initiation of a new billing account and the delivery of carts to the premises. 3.0 New Agreement Highlights An abbreviated overview of the services offered as part of the new Agreement is provided in this section. A detailed description of each service component can be found in Section 5 of the Agreement. 3.1 Single Family Dwelling (SFD) Services Standard service will feature automated collection of solid waste, recycling and green waste. Residents will receive one 96-gallon container each for solid waste, recycling and green waste. Residents may request an additional recycling and an additional green waste cart for no additional charge. Residents may request an exchange for smaller cart sizes. They may also request additional carts beyond the one solid waste, two recycling and two green waste carts included in the standard rate for an additional fee. Solid waste will be collected on a weekly basis. Recycling and green waste will be collected bi-weekly. City of Carson City Franchise Solid Waste Services RFP December 2018 Negotiation Report Page 5

9 Standard service also includes the collection of up to four bulky items per year. The items may be picked up separately or in any combination. Additional items beyond the four included in the standard service may be requested at an additional charge. Christmas Tree collection is provided at no additional charge. 3.2 Commercial and Multi-Family Collection Services Commercial and Multi Family customers will be able to subscribe to solid waste, recycling and/or green waste services. Recycling collection is offered at a rate that is 80% of the solid waste collection rate. Customers may request bulky item, electronic waste and universal waste collection services at an additional charge. 3.3 City Collection Services All City solid waste, recycling, and green waste collection services at City service units will be provided at no charge. Bulky item collection from City service units will also be provided at no charge. In addition to the city facility collection services, the following is included: City Clean Up Service The provision of the containers and staff necessary for temporary clean-up programs at centralized collection sites at no charge for up to four events each year. Special Event Collection Service The provision of collection services at no charge for City-sponsored events that are open to the public and that do not require paid admission or the purchase of a ticket. Neighborhood Clean-Up Program An annual Neighborhood Clean-Up Program, where residents are permitted to place bulky items curbside on a designated day according to designated parameters. On-Call Bulky Item Service On-call collection of illegally dumped bulky items at the request of the City within 48 hours of notification by the City. Recycling Drop-Off Site Service Operation of the Recycling Drop-Off Site at the Carson City Sanitary Landfill. 3.4 Public Education and Outreach The new Agreement includes a robust public education and outreach program, including the development and distribution of materials during the initiation of the new collection services program. This also includes distribution of literature with delivery of new carts and bins to all customers at inception of the new program. Customers will receive an information packet that describes all of the available services. This packet will be updated and redistributed every five years. Any new customers will receive the packet at the time of service initiation. This packet will: City of Carson City Franchise Solid Waste Services RFP December 2018 Negotiation Report Page 6

10 describe available services, including available recycling and diversion programs; provide instructions for proper use of the carts and bins provided (such as how to place carts or other permitted items for collection, the types of materials to be placed in each cart); include detailed holiday collection schedules; provide billing and customer service telephone numbers; and instructions on City-managed solid waste programs and services such as information on the City s free dump program and HHW program. Examples of a few of the sample materials provided by WM are shown below and on the following page. City of Carson City Franchise Solid Waste Services RFP December 2018 Negotiation Report Page 7

11 3.5 Additional Offerings WM also included the following service offerings in their proposal to the City: Clean-Air Vehicles WM will provide a clean-diesel fleet in Carson City. According to a recent study by the Health Effects Institute and sponsored by the U.S. Environmental Protection Agency (EPA), the California Air Resources Board, the U.S. Department of Energy, and the U.S. Federal Highway Administration, clean-diesel technology has near-zero emissions for nitrogen oxides, hydrocarbons, and particulate matter. Solar Compactors WM will give the City five Big Belly solar powered compactors at the start of the Agreement to be used at locations determined by the City. The solar compactors can be placed downtown, or at any location determined by the City and will be serviced by WM as part of no-cost City services. City of Carson City Franchise Solid Waste Services RFP December 2018 Negotiation Report Page 8

12 4.0 Conclusion WM prepared an excellent proposal that was fully responsive to the requirements of the RFP. The proposal included a reduction in rates for residential and commercial customers, with WM offering the lowest rates among the five proposers. WM actively participated in the negotiation process and provided responsive answers to information requests. The company demonstrated a clear understanding of the City s concerns regarding customer service provision and a willingness to take concrete steps in response to feedback from the Board. As a result, the following was achieved: Stronger Agreement language that gives the City the ability to hold WM accountable for providing excellent customer service, including enhanced default and termination language that specifically identifies customer service issues, as well as increased liquidated damage provisions for customer service issues An early implementation plan that includes the opening of the local call center three months prior to the commencement of the new Agreement and immediate distribution of the local phone number and address The withdrawal of proposed rates for roll-off and compactor customers and offer of 2018 rates for these customers. These key concessions, combined with the strength of the company s proposed services and rates, represent a strong value for Carson City, its residents and local businesses. SVM recommends that the City execute the negotiated Agreement with WM. City of Carson City Franchise Solid Waste Services RFP December 2018 Negotiation Report Page 9

13 City of Carson City Collection Services Franchise RFP Negotiation Report December 20,

14 Process Overview Negotiations addressed four key components: Strengthening customer service Agreement language Achieving improved value for roll-off and compactor customers Eliminating or reducing selected fees Negotiation of proposed Agreement language changes Waste Management was responsive, provided timely communication and agreed to changes required by the City. 2

15 Customer Service Performance Standards Local Customer Service Office All Carson City customer service and call center operations will be conducted locally. Customer Communication Customers will have access to a local, dedicated website Customers communication will be enhanced with additional tools for notifying the customer of issues Public Outreach and Education Comprehensive printed materials with service information and recycling education will be provided throughout the term of the agreement 3

16 New or Strengthened Contractual Remedies for Non-Performance Customer Service Performance failure is now included as an Event of Default subject to Termination. New language has been added to the agreement including a corrective action plan with escalated liquidated damages Liquidated damages for customer service incidents increased to $300 per incident from $100 per incident. 4

17 Customer Service Deliverables: Early Implementation Highlights of Customer Service deliverables to be completed prior to the start of the new agreement include: WM will have the local call center fully operational by April 1, 2019 WM local phone number now operational ( ) now active and is monitored in real time WM insert with phone number and sent in November billing WM will place new phone number decals on WM trucks WM will mail recycling calendars in January and at start of new services WM local website will be accessible to customers by February 1,

18 Rate and Fee Negotiations Temporary Roll-Off and Compactor Rates WM agreed to lower the proposed rates and return to the current pricing structure temporary roll-off and compactor rates will remain in effect at the start of the 2019 agreement term. Fee elimination WM agreed to eliminate the maintenance fee for Vacation Service Suspensions and to eliminate the restart fee for Vacancy Service Suspensions if there is no change to the customer account WM agreed to eliminate or reduce additional service fees as requested for certain customer-requested additional services 6

19 New Agreement Highlights Single Family Dwelling Services Automated solid waste, recycling and green waste service Bulky item collection of four items per year at no additional charge Defines up to six bags and/or boxes as a single item Christmas tree collection Commercial and Multi-Family Services Optional recycling and green waste collection service Optional bulky item, electronic waste and universal waste collection 7

20 New Agreement Highlights City Collection Services City Clean Up Service: The provision of the containers and staff necessary for temporary clean-up programs at centralized collection sites at no charge for up to four events each year. Special Event Collection Service: The provision of collection services at no charge for City-sponsored events that are open to the public and that do not require paid admission or the purchase of a ticket. Neighborhood Clean-Up Program: An annual Neighborhood Clean-Up Program, where residents are permitted to sign-up to place bulky items curbside on a designated day according to designated parameters. On-Call Bulky Item Service: On-call collection of illegally dumped bulky items at the request of the City within 48 hours of notification by the City. Recycling Drop-Off Site Service: Operation of the Recycling Drop-Off Site at the Carson City Sanitary Landfill. 8

21 New Agreement Highlights Additional Offerings Clean-Air Vehicles Waste Management will provide a clean-diesel fleet in Carson City. Solar Compactors Waste Management will give the City five Big Belly solar powered compactors at the start of the Agreement to be used at locations determined by the City. The solar compactors can be placed at any location determined by the City and will be serviced by WM as part of no-cost City services. 9

22 Conclusion The following was achieved through negotiations: Stronger Agreement language that gives the City the ability to hold WM accountable for providing excellent customer service An early implementation plan that includes the opening of the local call center three months prior to the commencement of the new Agreement and immediate distribution of the local phone number and address Negotiated changes to specific rates and fees Negotiation of specific language changes These key concessions, combined with the strength of the company s proposed services and rates, represent a strong value for Carson City, its residents and local businesses. 10

23 City of Carson City Collection Services Franchise RFP Negotiation Report December 20,

24 CARSON CITY FINAL DRAFT COLLECTION SERVICES FRANCHISE AGREEMENT Executed Between CARSON CITY and Waste Management of Nevada, Inc. This day of Month, 20

25 Table of Contents RECITALS 1 ARTICLE 1: DEFINITIONS AFFILIATE AGREEMENT AGREEMENT YEAR ALTERNATIVE DAILY COVER (ADC) APPLICABLE LAW APPROVED DISPOSAL FACILITY APPROVED FACILITY APPROVED ORGANIC MATERIALS PROCESSING FACILITY APPROVED RECYCLABLE MATERIALS PROCESSING FACILITY BIN BIOHAZARDOUS OR BIOMEDICAL WASTE BOARD BULKY ITEM BULKY ITEM COLLECTION SERVICE BUSINESS DAYS CART CHANGE IN LAW CITY CITY CLEAN-UP SERVICE CITY CONTAINER SERVICE CITY SERVICE UNIT CITY WASTE COLLECT, COLLECTED, COLLECTION COMMERCIAL SERVICE WORK DAY COMMENCEMENT DATE COMMERCIAL, COMMERCIAL SERVICE UNIT COMMERCIAL WASTE COMPACTOR, COMPACTION COMPOST COMPOSTING CONSTRUCTION AND DEMOLITION DEBRIS (C&D) CONTAINERS CONTRACTOR CONTRACT ADMINISTRATOR CONTRACTOR COMPENSATION CONTRACTOR S PROPOSAL CUSTOMER DAY 7 ii

26 1.39 DISCARDED MATERIALS DISPOSAL DISPOSAL FACILITY DWELLING UNIT EFFECTIVE DATE ELECTRONIC WASTE, E-WASTE ENVIRONMENTAL LAWS EXEMPT WASTE FIXED BODY VEHICLE FOOD WASTE GENERATOR GREEN WASTE GROSS BILLINGS HAZARDOUS SUBSTANCE HAZARDOUS WASTE HOLIDAYS HOME GENERATED SHARPS HOUSEHOLD BATTERIES HOUSEHOLD HAZARDOUS WASTE (HHW) LIQUIDATED DAMAGES MASTER BILLED COMMUNITY MATERIALS RECOVERY FACILITY (MRF) MULTI-FAMILY, MULTI-FAMILY DWELLING (MFD), MULTI-FAMILY SERVICE UNIT NON-COLLECTION NOTICE ORGANIC MATERIALS ORGANIC MATERIALS PROCESSING FACILITY PARTY, PARTIES PERSON PREMISES PROCESSING RATE YEAR RECYCLABLE MATERIALS RECYCLE, RECYCLING RECYCLING DROP-OFF SITE RESIDENTIAL, RESIDENTIAL PROPERTY RESIDENTIAL SERVICE WORK DAY RESIDUE REUSABLE MATERIALS ROLL-OFF BOX SERVICE AREA SERVICE LEVEL SERVICE RECIPIENT SINGLE-FAMILY, SINGLE-FAMILY DWELLING (SFD), SINGLE-FAMILY SERVICE UNIT SOLID WASTE SOURCE SEPARATED, SOURCE SEPARATION SPECIAL EVENT COLLECTION SERVICE STATE SUBCONTRACTOR TERM 13 iii

27 1.88 TRANSFER STATION UNIVERSAL WASTE WHITE GOODS 13 ARTICLE 2: REPRESENTATIONS AND WARRANTIES CONTRACTOR S CORPORATE STATUS CONTRACTOR S CORPORATE AUTHORIZATION AGREEMENT WILL NOT CAUSE BREACH NO LITIGATION NO ADVERSE JUDICIAL DECISIONS NO LEGAL PROHIBITION CONTRACTOR S ABILITY TO PERFORM CONTRACTOR S INVESTIGATION STATEMENTS AND INFORMATION IN CONTRACTOR S PROPOSAL 15 ARTICLE 3: TERM OF AGREEMENT INITIAL TERM EXTENSION OF INITIAL TERM OTHER PROVISIONS 15 ARTICLE 4: GRANT AND ACCEPTANCE OF EXCLUSIVE AGREEMENT GRANT AND ACCEPTANCE OF EXCLUSIVE AGREEMENT LIMITATIONS TO THE SCOPE OF EXCLUSIVE AGREEMENT EXCLUDED SERVICES EXCLUSIVITY ENFORCEMENT OF EXCLUSIVITY APPLICABLE LAW OBLIGATIONS OF PARTIES 18 ARTICLE 5: SCOPE OF COLLECTION SERVICES SUMMARY SCOPE OF SERVICES USE OF APPROVED FACILITIES SUBCONTRACTING RESPONSIBILITY FOR MATERIALS CITY-DIRECTED CHANGES TO SCOPE SINGLE-FAMILY DWELLING COLLECTION SERVICES MULTI-FAMILY DWELLING COLLECTION SERVICES COMMERCIAL COLLECTION SERVICES CITY COLLECTION SERVICES TEMPORARY BIN COLLECTION SERVICES PUBLIC EDUCATION AND OUTREACH 29 ARTICLE 6: PROCESSING AND DISPOSAL REQUIREMENTS OWNERSHIP OF SOLID WASTE, RECYCLABLE MATERIALS, AND ORGANIC MATERIALS TRANSPORTATION OF DISCARDED MATERIALS TRANSFER OF DISCARDED MATERIALS DISPOSAL RECYCLABLE MATERIALS PROCESSING SERVICES ORGANIC MATERIALS PROCESSING SERVICES 33 iv

28 ARTICLE 7: REQUIREMENTS FOR OPERATIONS, EQUIPMENT AND PERSONNEL GENERAL CONTRACTOR S OFFICE SERVICE STANDARDS COLLECTION ROUTES, OPERATING HOURS AND SCHEDULES COLLECTION STANDARDS OWNERSHIP OF MATERIALS EXEMPT WASTE REGULATIONS AND RECORD KEEPING VEHICLE REQUIREMENTS CONTAINER REQUIREMENTS LABOR AND EQUIPMENT HOLIDAY SERVICE DISPOSAL AND PROCESSING SOLID WASTE - IMPROPER PROCEDURE RECYCLING - IMPROPER PROCEDURE ORGANIC MATERIALS - IMPROPER PROCEDURE COMMINGLING OF MATERIALS PERSONNEL HAZARDOUS WASTE INSPECTION AND HANDLING 45 ARTICLE 8: BILLING, CUSTOMER SERVICE, RECORD KEEPING, AND REPORTING BILLING AND COLLECTION DELINQUENT SERVICE ACCOUNTS ACCOUNT SUSPENSION MANDATORY SFD SERVICE EXEMPTION LOW-INCOME SENIOR CITIZEN MAXIMUM SERVICE RATES NON-DISCLOSURE NO MARKETING CUSTOMER SERVICE STAFFING AND HOURS CONTRACTOR S CUSTOMER SERVICE RECORD KEEPING REPORTING REQUIREMENTS AUDIT REQUIREMENT 52 ARTICLE 9: FRANCHISE FEES AND OTHER FEES FRANCHISE FEE CONTRACTOR S PAYMENTS TO CITY ADDITIONAL FEES 53 ARTICLE 10: CONTRACTOR COMPENSATION AND MAXIMUM SERVICE RATES CONTRACTOR COMPENSATION MAXIMUM SERVICE RATES INITIAL SERVICE RATES SCHEDULE OF FUTURE ADJUSTMENTS METHOD OF FUTURE ADJUSTMENTS EXTRAORDINARY RATE ADJUSTMENTS 55 v

29 ARTICLE 11: INDEMNIFICATION, INSURANCE AND PERFORMANCE BOND INDEMNIFICATION OF THE CITY EVALUATION OF LIABILITY HAZARDOUS SUBSTANCES INDEMNIFICATION SEPARATE COUNSEL CONSIDERATION OBLIGATION SUBCONTRACTORS EXCEPTION DAMAGE BY CONTRACTOR SURVIVAL INSURANCE PERFORMANCE BOND 64 ARTICLE 12: DEFAULT AND REMEDIES EVENTS OF DEFAULT RIGHT TO TERMINATE UPON EVENT OF DEFAULT CITY S REMEDIES IN THE EVENT OF DEFAULT POSSESSION OF RECORDS UPON TERMINATION CITY S REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE PERFORMANCE STANDARDS AND LIQUIDATED DAMAGES EXCUSE FROM PERFORMANCE RIGHT TO DEMAND ASSURANCES OF PERFORMANCE 72 ARTICLE 13: OTHER AGREEMENTS OF THE PARTIES LEGAL REPRESENTATION FINANCIAL INTEREST CONTRACTOR NOT OFFICER, EMPLOYEE OR AGENT CONTRACTOR S USE OF SUBCONTRACTOR COMPLIANCE WITH LAW GOVERNING LAW LITIGATION JURISDICTION BINDING ON SUCCESSORS ASSIGNMENT NO THIRD-PARTY BENEFICIARIES WAIVER TRANSITION TO NEXT CONTRACTOR CONTRACTOR S RECORDS NOTICE PROCEDURES 78 ARTICLE 14: MISCELLANEOUS AGREEMENTS ENTIRETY OF AGREEMENT SEVERABILITY RIGHT TO REQUIRE PERFORMANCE NON-DISCRIMINATION ALL PRIOR AGREEMENTS SUPERSEDED HEADINGS EXHIBITS 80 vi

30 14.8 REFERENCES TO LAWS EFFECTIVE DATE AMENDMENTS 80 EXHIBIT 1: MAXIMUM SERVICE RATES 81 EXHIBIT 2: RATE ADJUSTMENT METHODOLOGY 86 EXHIBIT 3: INITIAL DISPOSAL INDEX 87 EXHIBIT 4: LIST OF CITY SERVICE LOCATIONS 88 EXHIBIT 5: LIST OF RECYCLABLE MATERIALS 90 EXHIBIT 6: MEMORANDUM OF UNDERSTANDING 91 vii

31 This Collection Service Franchise Agreement, hereinafter referred to as Agreement, is made and entered into this day of MONTH, 20, by and between Carson City, a consolidated municipality and political subdivision of the State of Nevada, hereinafter referred to as CITY, and Waste Management of Nevada, Inc., a private corporation lawfully authorized to conduct business in the State of Nevada, hereinafter referred to as "CONTRACTOR." In this Agreement, the CITY and CONTRACTOR may be collectively referred to as the Parties and individually referred to as Party. RECITALS WHEREAS; this Agreement is entered into between the Parties heretofore named for the purpose of implementing a franchise for the Collection of Solid Waste, and defining the rights and obligations of the Parties; WHEREAS; the CITY is a consolidated municipality and has authority under Nevada Revised Statutes ( NRS ) (3) & NRS (3) to displace or limit competition for the Collection and Disposal of Solid Waste to provide adequate, economical and efficient services to the inhabitants of Carson City and to promote the general welfare of those inhabitants, and by granting this exclusive franchise intends to limit competition in the Collection of Solid Waste for the purpose of providing adequate, economical and efficient services to the residents of the CITY and to promote the general welfare of its residents; WHEREAS; CONTRACTOR is a private entity that provides certain services in the solid waste industry and which is capable of providing the CITY with Solid Waste handling services, and has further represented and warranted to the CITY that it has the requisite experience, responsibility, and qualifications to provide to the CITY s residents and commercial institutions services for the Collection, safe transport and permanent Disposal of all Solid Waste within the CITY; WHEREAS; the CITY hereby declares its intention of maintaining reasonable rates for reliable, proven Collection, transportation and Disposal of Solid Waste within the CITY; WHEREAS; the CITY further declares its intent to approve and maintain the Maximum Service Rates for the Collection, transportation, Processing, Recycling, Composting, and/or disposal of Solid Waste; and; WHEREAS; the Parties desire to enter into a wholly exclusive Agreement for the provision of Collection Services except as otherwise specifically provided or limited in this Agreement; and, WHEREAS; this Agreement has been developed by and is mutually agreed to be satisfactory to the CITY and the CONTRACTOR, NOW, THEREFORE, for and in consideration of the covenants and agreements herein contained and for other valuable consideration, the receipt of which is hereby specifically acknowledged, the Parties do hereby agree as follows: City of Carson City DRAFT Agreement Page 1

32 ARTICLE 1: DEFINITIONS For the purpose of this Agreement, the definitions contained in this Article shall apply unless otherwise specifically stated. If a word or phrase is not defined in this Agreement, the definition of such word or phrase as contained in the Carson City Municipal Code of Ordinances shall control. When not inconsistent with the context, words used in the present tense include the future, words in the plural include the singular, and words in the singular include the plural. Use of the masculine gender shall include the feminine gender. 1.1 AFFILIATE Affiliate means all businesses, including, without limitation, corporations, limited and general partnerships and sole proprietorships, that are directly or indirectly related to the CONTRACTOR by virtue of direct or indirect ownership interest or common management. Such businesses shall be deemed to be Affiliated with the CONTRACTOR and included within the term Affiliates as used herein. An Affiliate includes: (i) a business in which the CONTRACTOR has a direct or indirect ownership interest; (ii) a business that has a direct or indirect ownership interest in the CONTRACTOR; and/or (iii) a business that is also owned, controlled or managed by any business or individual which has a direct or indirect ownership interest in the CONTRACTOR. For the purposes of this definition, ownership means ownership as defined in the constructive ownership provisions of Section 318(a) of the Internal Revenue Code of 1986, as in effect on the Effective Date, provided that ten percent (10%) shall be substituted for fifty percent (50%) in Section 318(a)(2)(C) and in Section 318(a)(3)(C) thereof; and Section 318(a)(5)(C) shall be disregarded. For purposes of determining ownership under this paragraph and constructive or indirect ownership under Section 318(a), ownership interest of less than ten percent (10%) shall be disregarded and percentage interests shall be determined on the basis of the percentage of voting interest of value that the ownership interest represents. 1.2 AGREEMENT Agreement means this Agreement between the CITY and the CONTRACTOR, including all exhibits, and any future amendments hereto. 1.3 AGREEMENT YEAR Agreement Year means each twelve (12) month period from July 1st to June 30th, beginning July 1, ALTERNATIVE DAILY COVER (ADC) Alternative Daily Cover or ADC means materials placed on the surface of the active face of the refuse fill area at the end of each operating day to control vectors, fires, odor, blowing litter and scavenging. 1.5 APPLICABLE LAW Applicable Law means all federal, state and local laws and regulations adopted thereto, including, without limitation, Environmental Law and any other regulations, rules, orders, judgments, degrees, permits, approvals, or other requirement of any governmental agency having jurisdiction over the Collection, transportation, Processing City of Carson City Final DRAFT Agreement Page 2

33 or Disposal of Discarded Materials that are in force on the Effective Date and as may be enacted, issued or amended during the Term of this Agreement. 1.6 APPROVED DISPOSAL FACILITY Approved Disposal Facility means the Carson City Sanitary Landfill or such other disposal facility directed by the CITY, which is fully permitted and in compliance with all applicable federal, state and local laws and regulations adopted thereto governing such disposal. 1.7 APPROVED FACILITY Approved Facility means any one of or any combination of the: Approved Disposal Facility; Approved Organic Materials Processing Facility; Approved Recyclable Materials Processing Facility; and/or Approved Transfer Station. 1.8 APPROVED ORGANIC MATERIALS PROCESSING FACILITY Approved Organic Materials Processing Facility means the Nevada Compost located in Carson City, Nevada. 1.9 APPROVED RECYCLABLE MATERIALS PROCESSING FACILITY Approved Recyclable Materials Processing Facility means the Waste Management Eco Center Campus located in Reno, Nevada BIN Bin means a metal or plastic Container, with a capacity of one (1) cubic yard up to, and including, eight (8) cubic yards, designed or intended to be mechanically dumped into a loader packer type truck that is approved for such purpose by the CITY. Bins may also include Compactors that are owned by the Multi-Family Dwelling (MFD) or Commercial Service Unit wherein the MFD or Commercial Collection Service occurs BIOHAZARDOUS OR BIOMEDICAL WASTE Biohazardous or Biomedical Waste means Discarded Materials which are likely to be infectious, pathological or biohazardous, originating from residences, hospitals, public or private medical clinics, departments of research laboratories, pharmaceutical industries, blood banks, forensic medical departments, mortuaries, veterinary facilities and other similar facilities, including, without limitation, equipment, instruments, utensils, fomites, laboratory wastes, including, without limitation, pathological specimens and fomites attendant thereto, surgical facilities, equipment, bedding and utensils, including, without limitation, pathological specimens and disposal fomites attendant thereto, sharps, including without limitation, hypodermic needles, and syringes, dialysis unit waste, chemotherapeutic waste, animal carcasses, offal and body parts, biological materials, including, without limitation, vaccines and medicines, and other similar materials, but excluding any such Discarded Materials which are reasonably determined by the CONTRACTOR to be noninfectious, non-pathological and non-biohazardous BOARD Board means the Carson City Board of Supervisors. City of Carson City Final DRAFT Agreement Page 3

34 1.13 BULKY ITEM Bulky Item means discarded appliances, furniture, tires, carpets, mattresses, and similar large items that require special Collection due to their size or nature, but can be Collected without the assistance of special loading equipment such as forklifts or cranes and without violating vehicle load limits. Up to a total of six (6) 32-gallon bags, small boxes and/or bundles of Solid Waste, none of which may be greater than 3 x 3 x 3 or weigh more than 50 pounds, constitute a single Bulky Item BULKY ITEM COLLECTION SERVICE Bulky Item Collection Service means the periodic on-call Collection of Bulky Items by the CONTRACTOR in the Service Area and the delivery of those Bulky Items to the Approved Facility BUSINESS DAYS Business Days mean days during which the CITY s offices are normally open to do business with the public CART Cart means a heavy plastic receptacle and a rated capacity of at least thirty-two (32) gallons and not more than ninety-six (96) gallons, having a hinged, tight-fitting lid and wheels, that is approved by the Contract Administrator for use by Service Recipients for Collection Services under this Agreement CHANGE IN LAW Change in Law means the following events or conditions that may have a material and adverse effect on the performance by the Parties of their respective obligations under this Agreement: 1.18 CITY a. The enactment, adoption, promulgation, issuance, modification, or written change in administrative or judicial interpretation of any Applicable Law on or after the Effective Date; or, b. The order or judgment of any governmental body, on or after the Effective Date, to the extent such order or judgment is not the result of willful or negligent action, error or omission or lack of reasonable diligence of the CITY or of the CONTRACTOR, whichever is asserting the occurrence of a Change in Law; provided, however, that the contesting in good faith or the failure in good faith to contest any such order or judgment shall not constitute or be construed as such a willful or negligent action, error or omission or lack of reasonable diligence. CITY means either the area within the corporate boundaries of Carson City or the legal entity organized as a consolidated municipality, depending on the context CITY CLEAN-UP SERVICE CITY Clean-up Service means the Collection of Solid Waste, Green Waste, Recyclable Materials and Bulky Items by the CONTRACTOR resulting from written or verbal requests from the CITY for temporary clean-up programs at a centralized collection site. Such service shall include the provision of Bins or Roll-Off Boxes by the CONTRACTOR and the transport and delivery of the Collected materials to the appropriate Approved Facility. City of Carson City Final DRAFT Agreement Page 4

35 1.20 CITY CONTAINER SERVICE CITY Container Service means the Collection of Solid Waste and Recyclable Materials from City Containers and the transport and delivery of the Collected materials to the appropriate Approved Facility CITY SERVICE UNIT CITY Service Unit means those CITY properties or CITY locations which the Contract Administrator requests that the CONTRACTOR provide services as provided in this Agreement CITY WASTE CITY Waste means Solid Waste, Recyclable Materials, Green Waste, Organic Materials and Bulky Items generated at a CITY Service Unit COLLECT, COLLECTED, COLLECTION Collect, Collected or Collection means the act of the CONTRACTOR taking physical possession of, and removing Discarded Materials, whether by manual, semi-automated or automated means, and transporting such materials to the Approved Facility, pursuant to this Agreement COMMERCIAL SERVICE WORK DAY Commercial Service Work Day means any day Monday through Saturday COMMENCEMENT DATE Commencement Date means the date specified in Article 3.1 when the CONTRACTOR is to begin providing Collection and related services required by this Agreement COMMERCIAL, COMMERCIAL SERVICE UNIT Commercial or Commercial Service Unit means all retail, professional, office, wholesale and industrial facilities, and/or other Commercial enterprises offering goods or services to the public, excluding businesses conducted upon any Residential Property; organizations; and agencies other than CITY agencies COMMERCIAL WASTE Commercial Waste means Solid Waste, Recyclable Materials, Green Waste, Organic Materials and Bulky Items generated at a Commercial Service Unit COMPACTOR, COMPACTION Compactor, or Compaction means a mechanical apparatus that compresses materials, the Container that holds the compressed materials, and/or the process of compressing materials or holding compressed materials. Compactors include Bin Compactors of any size serviced by front-loading Collection vehicles and Compactors of any size serviced by Roll-Off Box Collection vehicles. City of Carson City Final DRAFT Agreement Page 5

36 1.29 COMPOST Compost means the resulting material from Composting, which does not include residue COMPOSTING Composting means the controlled or uncontrolled biological decomposition of organic constituents CONSTRUCTION AND DEMOLITION DEBRIS (C&D) Construction and Demolition Debris or C&D mean materials resulting from construction, renovation, remodeling, repair, or demolition operations relating to or resulting from a building, structure, pavement or other improvement, including, without limitation, concrete, brick, bituminous concrete, rubble, wood and masonry, composition roofing and roofing paper, steel, and other metals such as copper. Construction and Demolition Debris or C&D also includes, without limitation, rocks, soils, tree remains and other Green Waste which results from land clearing or land development operations in preparation for construction CONTAINERS Containers mean Bins, Carts, Compactors, and Roll-Off Boxes CONTRACTOR CONTRACTOR means Waste Management of Nevada, Inc CONTRACT ADMINISTRATOR Contract Administrator means the Operations Manager, or any subsequent Person, or his or her designee, designated by the CITY to administer and monitor the provisions of this Agreement CONTRACTOR COMPENSATION CONTRACTOR Compensation means the monetary compensation received by the CONTRACTOR in return for providing services in accordance with this Agreement as described in Article CONTRACTOR S PROPOSAL CONTRACTOR s Proposal means the proposal submitted to the CITY by the CONTRACTOR on August 21, 2018 for the provision of Solid Waste, Recyclables, and Organic Materials services and certain supplemental written materials CUSTOMER Customer means the Person to whom the CONTRACTOR submits its billing invoice and collects payment from for Collection services provided to a Premises. The Customer is not necessarily the owner of the Premises and may be either the Person who occupies the Premises or the owner of the Premises. City of Carson City Final DRAFT Agreement Page 6